Southeast Valley taking lion’s share of construction

​The
Southeast has recorded a
majority of Phoenix’s
net absorption since the end of the recession. Users have been attracted to new
developments in the area, which boasts a large
share of the
market’s construction activity.

Tempe
alone has been home to over 43 percent of the construction activity in the
Southeast since 2014. State Farm’s new campus in Tempe encouraged a wave of
build-to-suit activity in the submarket, and investors see the value in this
too. The recent sale of the campus was the largest office transaction ever
recorded in the state.

The Northeast saw a boom in construction leading up to the
recession, largely tied to expansions for users in the residential home
building and mortgage industry. When the market crashed, much of the new space
remained vacant for several years, leaving a supply overhang that warranted
little new development in the current cycle. ​​